Investing in real estate. Estateguru vs Reinvest24. Which real estate platform is better in 2022?
Hola amigos/as! It is high time for me to come forward with a deep and complete comparison of the two most interesting real estate investment platforms I have encountered, Estateguru vs Reinvest24 – so here it is.
I have to mention that I have analysed Reinvest24 before and have deep enough knowledge about the operations within Estateguru, so I believe I can share an adequate opinion on their assets. Moreover, I know both platforms to be trustworthy, well-functioning, client-oriented and offering excellent prospects. Bear in mind that this is not a win-lose situation – it is simply an evaluation stating some apparent pros and cons, as both platforms are very good at what they do and might be the best choice for you, depending on your goals.
So let’s sort out the wants of an average investor and what those platforms can offer.
I want a platform I can trust
Should we trust a more extensive, older platform or the one that is younger but operates in a way that demands respect and attention even among its more experienced peers?
In 2014, a group of inspired individuals in Tallinn, Estonia, established Estateguru. These guys wanted to make real estate investments available for all, and that’s what they did. In almost eight years of its operating history, Estateguru has given out 3,240 loans – their overall worth exceeds €521,295,668. It is a solid trans-European investment platform, an honest marketplace for property loans over mid and long-term periods.
Estateguru enables loans that are backed by properties for SMEs and fascinating investment opportunities for a massive base of investors. They currently have 120,000 active investors coming from 109 countries – quite a community. The average return on Estateguru is 11.24%.
Now let’s take a look at Reinvest24 – it is, by comparison, rather a pioneer yet. This Estonia-based crowdfunding platform for real estate investments launched in 2018, but its growth is astonishing. Reinvest24, too, wanted to include more people in the real estate investment market, making it more accessible. Today, it has 14,000 investors, and its average return is 14.8% – which is incredibly high. Reinvest24, as it follows from the name, is very much focused on reinvesting, asserting it is a tool that can increase your earnings even more. It also supplies equity loans to its investors. Since it’s a crowdfunding project, Reinvest24 allows you to invest in properties in smaller sums and not as if you were a sole investor. Plus, you get to benefit from your investments almost instantly.
The team of Reinvest24 is experienced in the field, has been in the business for over ten years, and includes real estate, finance, Marketing, and IT professionals.
The European Crowdfunding Regulation went into effect in November 2021, giving all EU platforms a year-long transition period. Both platforms are working on getting their structures to comply with the new set of rules. Now, Estateguru falls under the supervision of the Bank of Lithuania. Reinvest24, in its turn, is one step away from receiving its Estonian license.
I want diverse projects
Mid & big business owners, developers of various scales – these are the type of clients who take loans from Estateguru. Development loans offer a bridging loan; they also can support an entire real estate project. Business loans provide means that are backed by residential locations (houses) or commercial locations (like restaurants or resorts).
Estateguru loans are supported by real estate collateral. In case of a default, the backing real estate gets sold. I have to mention that their default rate is 7.09% but €0 capital is lost for now.
Estateguru explicitly provides all the info you might need as an investor to make an informed decision. Most loans on Estateguru are between 12 and 18 months. Depending on their payment timetable, they’ll either pay interest regularly and pay principal at the end of the loan (bullet payment) or pay both interest and principal at the end (full bullet payment).
Reinvest24, in its turn, has much more to lose and, therefore, can be way more diligent and attentive than any other such platform. The thing is that Reinvest24 owns all of their development & rental projects, supervising the sites by itself, excluding the third party. This means, of course, much higher risks at play for Reinvest24. This level of involvement makes the team very engaged and, consequently, incredibly responsible and focused on each project. And this is a big advantage for investors, who can benefit a lot from such involvement. Mortgages or collateral secure said projects. The LTV varies typically from 50 to 70%.
You get a fixed profit from what the projects generate if you invest. Then there are real estate-backed loans. It is a loan to a 3rd party with 1st rank mortgage and collateral. A credible borrower gets the financing and then proceeds to use the budget to construct a project. There are also rental projects – know-how of a sort, when Reinvest24 buys a space using the investor’s finances and then renovates and rents it, funneling all the earnings to the shareholders. Also, keep in mind that the default rate at Reinvest24 is 0% to date.
On top of overseeing their projects, Reinvest24 also began to finance third-party borrowers. However, in this case, there is only one borrower – KIRSAN Swiss GmBH Company, who recently became a shareholder of Reinvest24.
The primary market for Estateguru is Estonia, a stable and prosperous Baltic country. There are also loans from Latvia, Lithuania, Finland, Spain, Portugal, Sweden, and Germany. I believe there is a geographical expansion in the cards for them in the next few years – at least at today’s pace.
Reinvest24 offers projects from five markets – Estonia, Latvia, Spain, Germany, and Moldova. They are also expanding geographically, and I have to note that some of their projects, like the Moldovan one, are a black horse but genuinely captivating.
In other words, the scope of their shared market almost covers the whole European map – where one platform has a gap, another fills it.
I want the highest interest rate
Not so long ago, Estateguru introduced a deduction fee from the borrowers’ interest payments. The average interest rate of outstanding loans dropped to 9.84%.
In this scenario, the prominent advantage is on the side of the minor player. The average interest rate on Reinvest24 is 14.8% – yes, I’m serious. Even if we subtract the success fee computed from the invested principal, the average interest rate will still be around 14%. It is scandalous, much higher than on Estateguru or any other real estate investment platform. This exceptional interest rate is because Reinvest24 hosts its own ambitious projects, optimizing expenses and expecting more profit.
I want reasonable fees
€50 is enough to start investing with Estateguru. With Reinvest24, you need €100 to do the same. Both platforms work flawlessly as deposits and withdrawals, and most transactions are processed within two days. Depending on your bank, it can even take no more than a couple of hours.
Estateguru charges from 0% to 1% – it is a fee deducted from the borrower’s interest payment. Reinvest24 charges 1% from the principal amount at the end of the project. Taking that into account, you as an investor can earn more at Reinvest24.
Also, when withdrawing, you will get a small fee – in the case of Reinvest24, it is 2 EUR, Estateguru – 1 EUR.
I want to exit the investment whenever I need
And it is doable on both platforms. The secondary market is well represented on both platforms – because both can see its beneficial potential.
Over 90,000 investors on the Estateguru platform may want to buy and sell their investments before they mature. Estateguru charges a 2% fee for the seller on the secondary market. When you go into the secondary market on Estateguru, you get to filter your options by price, the remaining period until the loan matures & even by the expected return (AROI) – which incorporates the discount or premium on the loan.
Reinvest24 also has a stunning array of secondary market offers. They allow you to buy and sell as many shares as you like. The swell thing is that you can sell your investment partially. For example – if you have an investment worth €5K, which you want to sell, you can sell it to 100 different investors instead of 1. Each will invest €50, completing your sum. May take time, but since it’s 100 people, your offer becomes way more accessible and you are guaranteed to get it back. Also, when receiving monthly interests, you can reinvest those small bids on the secondary market, thus increasing your returns and making your investment even more effective. Note that the initial price is always €1.00, and everything above will result in an insignificant loss.
By introducing an early exit option, both platforms increase the liquidity of the investment because you can cash out at any time.
Commissions are the same as on the primary market. So, Reinvest24 offers a 1% fee for buyers and zero fees for sellers.
I want good service
I applaud both platforms for their customer service and focus on comfort and care.
Estateguru statistics page is very detailed and supplies essential data any potential investor would be happy to explore.
Reinvest24 doesn’t have its stats on display, but any investor can assess the data upon request. However, they are pretty fast in responding. They also noted that the statistics page would be up shortly. These are some of the numbers they have forwarded to me recently:
At Estateguru, you can even download the handy loan book – there are over 3 thousand active projects, but they still want you to be able to track all of them. Reinvest24 doesn’t offer anything like that yet.
Creating an account on both platforms is straightforward – several simple steps, identification, e voila.
To start investing at Estateguru, you have to pass authentication and create an account. The first step is a standard KYC procedure, where you have to supply any type of identification. The overall process takes no more than 5 minutes and you’re all set to invest. The site is simple, user-friendly, nice to look at, includes tons of interesting info, available in English, Estonian, Latvian, German and Russian.
Reinvest24’s website is intuitive, simple, and easy to navigate. Directly on the home page, you can read all there is to know about Reinvest24 and register in 2 clicks. There is also an investment calculator – a cool tool that lets you estimate earnings even before you start investing. You enter your chosen project conditions, select the amount you are going to invest – and the calculator shows you how much you will earn in prospect.
To become an investor, you have to submit a registration form. It is as simple as on any other such website, including the standard KYC procedure. Once you’re through with filling out the form, your account becomes active, and you can begin investing.
I want… both?
So, what’s the gist of it? Which one of these would a potential investor want?
On the one hand, Estateguru is the biggest real estate platform on the market. Also, the platform’s interface is user-friendly and convenient. Any information you’d want to find is just a couple of clicks away. If you are looking for a more passive way of investing, you can use an auto-invest tool. However, the sum that you can auto-invest is only €250, which might not be a serious/wanted move for some. The projects are getting funded quickly, and their quantity is one of the highest on the real estate market.
The critical advantage of Estateguru is its diversification options, as they publish a considerable volume of projects from 7 countries. So if you want to invest small amounts into many projects with an average interest rate of 10% – choose Estateguru.
Check out my Estateguru page where I track my returns on a monthly basis since inception HERE
What I love about Reinvest24 is its high interests and project offers. The platform is growing fast, developing its project line and country diversification opportunities. Even though they definitely could add more filters and improve the overview of the investor’s cabinet, the platform for sure improved a lot over the past years. The most remarkable advantage of Reinvest24 is its project quality and high yields. On top of that, the default rate is 0% – certainly an excellent selling point. The team doesn’t play on a volume yet but rather cherry-picks the gems. And taking into account their “big skin in the game,” I find this approach very appropriate. We investors certainly can only benefit from it.
In short, Reinvest24 allows you to earn higher profits while investing in developing markets and stable European ones. So, investing more considerable amounts would be the best approach.
Check out my Reinvest24 page where I track my returns on a monthly basis since inception HERE
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